Peso weakens to P43 against $1 as oil prices spike

MANILA, Philippines- The peso fell back to the P43 to a $1 level on Tuesday as players traded with caution amidst spiraling oil prices. The local currency closed at its intra day low of exactly P43 to a dollar, after touching a high of P42.810. Volume traded reached $715.075 million. News that the national government generated a budget surplus in April was received positively on Monday, but the enthusiasm did not last long as oil prices spiked past the $127/barrel level on supply fears. The BSP had already warned that high oil prices would narrow down the surplus in the country's international reserves because import costs would also go up. Analysts also expected dollar buyers to attempt to test the BSP's resolve to keep the dollar steady. They said they expected dollar bulls to try going at P43.85 on the way to P43 and this was exactly what they did yesterday. "However, we are seeing a short term corrective move as we feel the market is already dollar overbought," analysts said. - GMANews.TV